1.1 meeting customer needs

Question 1

What is a market ?

Answer 1

Any place where buyers and sellers can meet

Question 2

What is the aim of marketing?

Answer 2

Help identify, anticipate and satisfy consumer needs and wants profitably

Question 3

What is market research ?

Answer 3

It is a process of systematically gathering data from consumers which can be used to influence business decisions

Question 4

What is a mass market ?

Answer 4

Aimed at broad market segments so production is on a larger scale

Question 5

What is a niche market ?

Answer 5

Products are aimed at a subset of the larger market so production happens on a smaller scale

Question 6

What are the characteristics of mass v niche?

Answer 6

Mass
- economies of scale
- greater affordability
- lower profut margins

Niche
- more unique
- high average costs
- lower sales volume
- higher profit margins

Question 7

How can you measure the size of a market?

Answer 7

Sales volume
Sales value

Question 8

How do you work out sales revenue ?

Answer 8

price x quantity sold

Question 9

How do you work market share?

Answer 9

sales of a business / total sales in the market

Question 10

What is a brand?

Answer 10

A name, image, logo which helps one product/service stand out from its competitors

Question 11

What is the importance of branding ?

Answer 11

Add value

Influence business position

Communicate their offering

Charge higher prices

Question 12

What is a dynamic market ?

Answer 12

A market subject to rapid changes

Question 13

What areas do you consider when examining dynamic markets?

Answer 13

• Online retailing
• How markets change (demographic, tastes , competition)
• Innovation/Market growth
• Adapting to change

Question 14

What is the advantages and disadvanatges of online retailing for firms and consumers?

Answer 14

advantages
- wider range
- longer hours to trade
- cheaper
- collect data

disadvantages
- high development costs
- competition
- lack of personal contact
- return unwanted products
- security

Question 15

What is the difference between risk and uncertainty?

Answer 15

Risk - potential threat to business success
Uncertainty - Outcomes are difficult to predict

Question 16

What are some risks ?

Answer 16

Technical failures
Cyber Security Staff
Loss of key staff
Currency fluctuations

Question 17

What are some uncertainty?

Answer 17

Economy go into recession?
Energy rising prices?
Interest rates?

Question 18

What is product orientation?

Answer 18

An approach that focuses on the characteristics of the product rather than consumer needs

Question 19

What tools are needed for product orientation?

Answer 19

Product research
Product testing
Product Focus

Question 20

What is market orientation?

Answer 20

Approach to marketing that focuses on the needs of consumers and uses this information to design products

Question 21

What tools are needed for market orientation?

Answer 21

Market research
Market testing
Customer focus

Question 22

Why is effective market research needed?

Answer 22

To reduce risk when launching new products or entering new markets
Anticipate future needs and wants of consumers
To understand consumer behaviour
To identify potential consumer demand
To identify how much consumers are prepared to pay
To identify competitors and gauge their potential strengths and weaknesses

Question 23

What is primary market research ?

Answer 23

Process of gathering data directly from consumers in the target market using field methods such as surveys, interviews, observations

Question 24

What is the advantages and disadvanatges of primark market research?

Answer 24

Advantages :
- focused on needs
- in depth
- up to date

Disadvantages
- sample size too small
- bias
- hire a research agency

Question 25

What is secondary data ?

Answer 25

This involves the collection, compilation, and analysis of data that already exists eg from market reports, gov, documents

Question 26

What is the advantages and disadvanatges of secondary ?

Answer 26

advantages
- quick
- cheap
- suitable for smaller businesses

disadvantages
- lack relevance
- not tailored
- might be expensive to purchase

Question 27

How can ICT be used to support market research?

Answer 27

1. Webistes
2. Databases
3. Social Networking

Question 28

What is market segmentation?

Answer 28

The process in which a single market is divided into sub markets that has different consumer characteristics

Question 29

What are the Advantages & Disadvantages of Market Segmentation

Answer 29

• • range of segments for different customer needs
• • target groups precisely
• • increase loyalty
• • too small of a segment
• • expensice
• • detailed market research
• • hard to identfy different segments

Question 30

What is market posititioning ?

Answer 30

The process a business goes through when launching a new product or service

Question 31

What is market mapping?

Answer 31

Identify the position of a product within a market

Question 32

What is the usefulness and limitations of market mapping?

Answer 32

Useful
- identify if market is saturated or gaps are present
- compare with rivals
- simple

Limitations
- gap may exist because not profitable to fill
- expensive
- dynamic so constantly changing

Question 33

What are some sources of competitive advantage ?

Answer 33

Quality
Delivery times
Customer satisfaction
Ethics
Reputation
Reliability

Question 34

What is product differentiation ?

Answer 34

An attempt by businesses to distinguish its products from those of competitors

Question 35

What is adding value ?

Answer 35

The difference between the price that is charged to the customer and cost of inputs required to create the product or service

Question 36

What are methods of adding value?

Answer 36

Marketing
Design
Packaging
Customer serive
Customisation